Power trade with neighbours to grow

Calcutta, May 28: Indian power exchanges, trading in electricity at market rates, are upbeat on cross-border sales involving Nepal, Bangladesh, Bhutan and Myanmar.

Indian Energy Exchange Ltd and Power Exchange India Ltd are the two exchanges to benefit once a regulation on cross-border trade takes shape.

"The power ministry has already prepared the guidelines for cross border trade of electricity and the Central Electricity Regulatory Commission has come up with the draft regulations," said a power industry source with knowledge of the development.

"The draft guidelines offer scope of cross-border trade through power exchanges and once the regulations are firmed up, the exchanges would come into play. Some progress is likely to be expected over the next few months," he added.

The CERC's draft regulations show India importing around 1,450MW from Bhutan and exporting around 500MW to Bangladesh and 300MW to Nepal.

The power ministry estimates greater possibilities of trade by 2036, with India importing more from Bhutan and Nepal and exporting around 2,000MW to Bangladesh and 1,000MW to Sri Lanka.

The draft proposes the creation of a uniform framework for cross border trade.

"At present, the cross-border transactions in electricity between India and the neighbouring countries of Bhutan, Bangladesh, Nepal and Myanmar are taking place essentially through long-term, medium-term and short-term contracts under bilateral memorandum of understanding (MoU)/power trade agreements (PTA).

"It is envisaged that the new regulations to be framed by the commission will further harmonise the extant laws/rules/regulations governing cross border trade in electricity and create a common platform for all the stakeholders," the CERC draft report said.

The exchanges, meanwhile, are expecting monthly spot trades to remain firm with market clearing prices stabilising in the coming months.